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Blease gives up EnvisioNet ownership; Microdyne has no plan to cut work force

This story was published on
Sept. 08, 2001
on Page A10
in all editions of
the Bangor Daily News

AUGUSTA – With shaking hands and a strained voice, Heather Blease gave up ownership of the multimillion-dollar company she started more than six years ago and announced she was leaving it behind.

Taking a deep breath before she read from a prepared text, Blease introduced the new owners at a Friday afternoon press conference at EnvisioNet’s Augusta office.

Microdyne Outsourcing Inc. of Torrance, Calif., completed a $10.7 million purchase of EnvisioNet on Aug. 30 after the Maine tech support company with annual revenues of more than $30 million was forced into bankruptcy. The June filing under Chapter 11 was the result of a sudden decline in business from EnvisioNet’s biggest client, Microsoft Networks.

Sitting at the end of a table, television cameras aimed at her, Blease first spoke of appreciation for the employees and state officials, including Gov. Angus King, who helped her business grow from five people in 1995 to nearly 2,200 last spring. Some of those employees were at computer terminals in a nearby room. Then she said she would be gone at the end of the day.

“I will not be moving on in any capacity with Microdyne except as a friend and as an adviser,” Blease said.

Minutes before the press conference, Blease e-mailed the company’s remaining 900 employees in Orono and Augusta to tell them of her decision. Afterward, she was going to tell King.

Microdyne owner John Oakes said he watched EnvisioNet grow from its early beginnings, but never considered buying it from Blease until after she announced it was for sale.

“I’ve been following what Heather has been doing since 1997, almost with envy,” Oakes said.

Microdyne, owned by L-3 Communications, gives technical support for hardware and software products, and offers integrated product repair. It has two call centers, in California and Indiana, and employs about 600 people at both locations.

Oakes said that while other tech support companies have suffered losses in the last year, Microdyne has experienced 17 percent growth and is attempting to secure new contracts.

Oakes did not appear concerned about the reduction in workload from MSN earlier this year, or the uncertainty about whether Microsoft will continue to use his new acquisition to help its customers with questions about its products.

In May, Microsoft was rankled when word got out that its forecast reduction in workload was the reason EnvisioNet needed to lay off 600 people. Apparently in its agreement with Microsoft, EnvisioNet was not to tarnish Microsoft’s name in any way especially by linking the software giant to job losses. Concerned about further reductions because of the misstep, Gov. King flew to Seattle to meet with Microsoft officials to try to salvage EnvisioNet’s contract.

On Friday, Oakes said contracts signed with clients are “dependent on trust factors” and can be canceled within a day if that trust is broken.

“I am never going to comment on any client or any specific relationship with clients, ever,” Oakes warned reporters.

Microdyne has set up a transition team, led by EnvisioNet chief executive officer John Donnelly, and expects to complete the changeover in 60 days. Employees will receive current wages and benefits, he said, and no major job reductions are planned.

Oakes said that if jobs need to be cut in the future, it probably would be done on a “last in, first out” basis.

Microdyne gave Blease no financial compensation upon her departure, she said. Blease, however, faces possible personal litigation from some creditors for back payments on leases, and is reviewing options to protect her personal assets, she said.

It is not uncommon for majority shareholders of a company to sign personal guarantees to secure credit to lease equipment, she said. If the new owners do not assume the leases, creditors attempt to seek payment from the shareholder.

Robert Keach, an attorney representing the creditors committee in the bankruptcy proceedings, said the majority of creditors would receive payment through terms of the purchasing agreement.

Under its offer, Microdyne has agreed to pay about $6 million in cash and $3 million in earnouts or payments over time for the work being done by employees. The company also will assume $1.6 million in lease agreements for equipment, including $300,000 for computer and telephone networks used in the Orono branch.

Microdyne also is negotiating terms to continue leasing the Orono facility. Almost two years ago, the Orono Economic Development Corp. lent EnvisioNet more than $7.3 million – $5.3 million of which was used to build the EnvisioNet facility. That amount was to be paid back through a 20-year lease. The remaining $2 million in loans was used to buy equipment.

While Microdyne does not have a formal lease agreement yet, it began paying rent on the building this week. Orono Town Manager Gerry Kempen said Friday that Microdyne had made two payments totaling more than $100,000 this week, bringing the company’s post-bankruptcy rent up to date. Money still is owed on the pre-bankruptcy rent, he explained, but that likely will be part of the lease being negotiated between Microdyne and Orono.

Blease does not have any other position lined up with another company, and is planning to spend more time with her family. She said she has not ruled out starting another business, but that would be several years away. Blease and Oakes had discussions about the possibility of Blease staying with Microdyne, but her mind was made up to leave long before those talks, she said.

“I made a decision actually as we entered this [bankruptcy] process,” Blease said. “It didn’t make sense to stay. I think it’s a good time for me to move on to something else. It’s time to say goodbye.”